Category: Special Report

A confluence of familiar operating challenges and externally-induced crises, including backlashes from new COVID-19 variants, and the Russia-Ukraine war has forced global inflation to escalate, disrupted supply chains and triggered rising unemployment, among others. Without robust internal economic mechanisms to respond appropriately to the headwinds, local manufacturers feel the heat more, with many on the brink of collapse. Operators call for concerted efforts to address the domestic operating challenges and create anticipatory policy framework to mitigate global shocks. Assistant Editor CHIKODI OKEREOCHA reports.

Manufacturers and other real sector operators in Nigeria are facing the greatest existential threat ever. They are currently at risk of fizzling out from the industrial landscape, with dire consequences for the overall economy. Already hobbled by a barrage of familiar operating challenges, the impact of externally-induced crises, such as the lingering backlashes of the COVID-19 pandemic and its emerging variants, and now, the raging Russia-Ukraine war, have compounded their woes.

The cascading and intersecting effects of these globally-induced crises have been manifesting and taking a huge toll on manufacturers in Nigeria and indeed, other players in various sectors. This is so because Nigeria, sadly, does not boast functional institutions and strong internal economic mechanisms to respond appropriately to the shocks. As fallouts of these crises, global inflation has escalated; there has been serious shortfall in the global supply chain, followed by rise in energy cost, fertilizer and fertilizer inputs, wheat grain etc. With Nigeria still a largely import-dependent economy, fears are rife that an existential threat is dangling on operators in the nation’s industrial sector.

Such fears are not without justification. For one, the real sector, which comprises manufacturing and agriculture, is widely acknowledged as the economy’s growth engine, because it is credited with having the highest multiplier effect to the economy compared to other sectors. Manufacturing helps raise living standards more than any other sector. It generates more economic activities than other sectors, and many services exist because of manufacturing; and many service jobs, not a few operators fear, will disappear if manufacturing disappears.

However, this economic growth engine has been wobbling over the years, severely battered by numerous familiar challenges that have limited its performance and global competitiveness. The Director General of Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, puts the challenges in perspective when he said they have plummeted the number of industries in Nigeria and converted industrial hubs in many parts of the country to warehouses of imported goods and event centres.

Some of the challenges confronting the sector, according to him, include high operating cost environment occasioned largely by inadequate electricity supply and the high cost of alternative sources, rising inflation and energy cost, exchange rate volatility, and pervasive insecurity. Others are excessive regulation and taxation, declining consumer purchasing power, and inadequate supply of foreign exchange (forex) for importation of raw materials, spare parts and machinery that are not locally available etc. “All these have culminated into the lackluster performance of the sector,” Ajayi-Kadir lamented.

At the core of the existential threat currently steering manufacturers in the face, The Nation learnt, is the fact that most, if not all, of the afore-mentioned issues have yet to be significant addressed before concerns related to COVID-19 pandemic, which is now in its third year, and its Delta and Omicron variants were thrown into the mix. Prior to the deadly virus, which was first identified in China in late 2019, most Nigerian manufacturing companies imported a significant percentage of their materials from China, but the pandemic disrupted the global supply chain, leaving Nigeria, which is largely import-dependent, badly affected. China is the second largest economy in the world, after the United States. The Asian giant is a major supplier of inputs for manufacturing companies around the world, including Nigeria.

With over 70 per cent of Nigeria’s raw material said to be imported, and China representing Nigeria’s biggest trading partner, with about 19 per cent of its imports sourced from the country, the severity and scale of the disruption of local manufacturers’ supply chain come into bold relief. For instance, since the outbreak of the deadly virus, many Nigerian manufacturers and service providers have been experiencing acute shortage of raw materials and intermediate inputs for their operations. This, according to the Managing Director, Centre for the Promotion of Private Enterprise (CPPE), Mr. Muda Yusuf, has implications for manufacturers’ capacity utilisation, employment generation [and retention] and adequacy of products’ supply to the domestic market.

Yusuf, who was former Director General of the Lagos Chamber of Commerce and Industry (LCCI), also said the situation has implication for inflation, and the pressure has since been mounting. For manufacturers and operators in virtually all the sectors, including ordinary Nigerians, the fear of soaring inflation is perhaps the beginning of wisdom, as Africa’s largest and most populous economy has been witnessing persistent increase in inflation rate. For instance, at the last count, inflation in Nigeria surged to a depressing 17-year high of 19.64 per cent in July 2022, according to recently released Consumer Price Index (CPI) report for the month of July 2022, by the National Bureau of Statistics (NBS). The figure compared to the 18.6 per cent recorded in the previous month of June 2022. And the last time Nigeria’s inflation rose above 19.64 per cent was in September 2005 when it hit 24.32 per cent.

LCCI Director General, Dr. Chinyere Almona, said Nigeria had six consecutive months of increased inflation, attributing the high inflationary rate to rise in food and energy prices and forex scarcity for imports of critical raw materials. She also said constrained production due to insecurity in some agricultural sites across the country contributed to the high inflationary rate.

Her counterpart at MAN, Ajayi-Kadir, could not agree more. He, however, said apart from the insecurity and conflicts in the food producing areas, the disruption of supply chain activities due to COVID-19 pandemic and instability in the exchange rate market and management, among others, also compounded the inflationary pressure. The MAN DG said often times when disruption occurs in any part of the global economy, only countries with functional institutions and strong internal economic mechanisms will be able to respond appropriately to such external shocks. According to him, the current increase in prices of crude oil and other refined petroleum products such as diesel is one of such disruptions occasioned by external shocks that confirm the interwovenness of economies in the world.  “No doubt, the recent short supply and over 200 per cent increase in the price of Automotive Gas Oil (AGO), otherwise known as diesel, are part of the backlashes from the ongoing invasion of Ukraine by Russia,” Ajayi-Kadir said.

Confirming the precarious state of the manufacturing sector, Ajayi-Kadir said even if domestic food production increases and supply and distribution constraints are eased, a combination of exchange-rate management problems, shortages of hard currency, expansionary monetary policy, and the monetary funding of the fiscal deficit will continue to generate inflation pressures. He also said a slow recovery with increase in criminality due to high unemployment rate erodes the investor confidence in the capacity of the authorities to sustain adequate macro-economic activity that will support the economy’s post-pandemic recovery.

Dr. Almona brought the current realities as they affect manufacturers nearer home when she lamented that for manufacturers, input prices have spiked as prices of items such as diesel, which most firms depend on for powering their factories, have continued to rise, causing unbearable rise in cost of production. She further said rising cost of production also translates to higher consumer prices. “Nigeria’s energy crisis is worsened by the poor supply of electricity and a bumpy road to renewable energy deployment. The continuous increase in general prices of goods in Nigeria and its multiplier effects on the standard of living of the citizens are a threat to the nation’s growth and economic recovery post-COVID-19. The double-digit inflation rate is frustrating efforts towards economic recovery, eroding the purchasing power of consumers and increasing the poverty rate in the country,” Ajayi-Kadir stressed.

Backlashes from Russia-Ukraine war

Like a stone thrown in the middle of a river, the ripple effects of Russia’s invasion of Ukraine are being felt in the outermost bounds of the globe, including Nigeria. Since the launch of an all-out military invasion of Ukraine by Russia on February 24, 2022, the world has never known peace. However, the financial and economic impacts of the on-going war are more telling. The war, now in its sixth month, has caused food, fuel and fertiliser prices to skyrocket. It has also disrupted supply chains and global trade, and roiled financial markets, fueling the threat of a global food crisis.

It is easy to see why this is so. Russia is the second-largest exporter of crude oil in the world, which makes its oil supply a major determinant in the direction of crude oil prices. It also boasts being one of the largest producers of natural gas and clean energy globally. Ukraine, on the other hand, is one of the main suppliers of wheat, sunflower oil and corn. It is also one of the main European producers of fertilisers. However, the production of these items stopped because of the war. Some manufacturers do not have the raw materials and even the ability to work – due to the threat of Russian missile strikes and other consequences of hostilities.

For Nigeria and other developing countries that have been battling record inflation, rising interest rates and huge debt burdens, among other headwinds, the outbreak of the war exacerbated their economic and financial problems. The current face-off between Russia and Ukraine has worsened the challenges around the global supply chain particularly to Nigeria, following the imposition of sanctions by the US and other European countries on Russia. As a result of the sanctions on Russia, most commodities prices touched multi-year highs with price of Nigeria’s crude oil, for instance, reaching US$100.2 per barrel as at Thursday, August 25, 2022. With Russia as the second-largest producer of oil globally, the conflict in the region is said to have disrupted oil supplies, reduced output and triggered higher prices.

“Already, oil price is above $100, and the impact on energy prices is already being felt around the world,” Dr. Yusuf said, adding that “In Nigeria, the deregulated components of petroleum products (diesel, aviation fuel, and kerosene and gas) have witnessed sharp increases.”

For instance, diesel has been deregulated over a decade now, but the war has forced its price to hit the roof top. From selling at N290 per litre at the beginning of the year, diesel now costs about N850 per litre. He said the escalation of the costs of diesel and other petroleum products have serious inflationary implications across sectors. Dr Yusuf projected an upsurge in Nigeria’s petrol import and subsidy bill as the landing cost of petrol increases on the back of the rise in crude oil price. The renowned economist said since Nigeria remains a major importer of petroleum products, and typically when oil prices increase, petrol import bill and subsidy payment also increase. He, however, added that there would be a positive investment effect on companies in the upstream segment of the oil and gas sector.

Other significant macro-economic fallouts of the war, according to experts, include heightened fiscal deficit, growing debt levels, spike in debt service payments and money supply growth. There are also fears around depreciation of the local currency, the naira, and of course, more intense inflationary pressures. The cost of flour, bread and other confectioneries has also skyrocketed, with bakers threatening to down tools over rising cost of flour, for instance. A loaf of bread, which originally cost between N400 and N500, now costs as much as between N800 and N1, 000, depending on the size.

Imperatives to push back headwinds

At the moment, the Nigerian economy, particularly the manufacturing sector, appears to be between the rock and the hard place. The economy is completely dependent on importation of refined petroleum products including diesel and other vital manufacturing raw materials. The fact that there are currently no sufficient alternatives locally to maneuver and keep their factories running may have boxed manufacturers to a corner. There are also no visible and strong internal economic mechanisms and buffers to wade off externally-induced shocks. Expectedly, the precarious situation has prompted operators to come up with a number of policy options and measures to pull the nation’s manufacturing sector back from the brinks and position it to play its traditional role as economy’s growth engine.

For Ajaiyi-Kadir, the need for the government to intentionally create an anticipatory policy framework that will facilitate automatic stabilisation of the economy in the event of domestic or global shocks has never been compelling. The MAN DG said the development of a sustainable national anticipatory policy measures to shield the economy and the manufacturing sector from global headwinds should be done; while at the same time address the familiar operating challenges hurting the sector’s performance. “The effect of the Russia-Ukraine war clearly underscored the popular maxim that the world has become a global village. The occurrence of an incident in a part of the world, notwithstanding how specific we may think, can actually become a global issue.

“Therefore, apart from the need for ardent management of global peace, the series of global occurrences and the lessons learnt demand that national governments should begin to take drastic measures to manage these phenomena proactively going forward,” he said, in a statement made available to The Nation.

The urgent need for government to prioritise “the development of a National Response and Sustainability Strategy to address challenges emanating from the on-going invasion of Ukraine by Russia is not the only option put forward by MAN to salvage the situation.”

MAN President, Engr Mansur Ahmed, also said as part of the federal government’s efforts to mitigate the impacts of the Covid-19 pandemic and its variants on the economy, the Central Bank of Nigeria (CBN) should extend its financial support to the supply of forex to the manufacturing sector at pre-Covid-19 rates. This must be why Dr. Almona advised on the need for a good mix of both fiscal and monetary policies to tackle the core drivers of inflation scourge in Nigeria. She also called for targeted financing for critical sectors like agriculture, food processing, aviation fuels, transport, and forex availability for manufacturing inputs. According to her, it is obvious that the government’s intervention so far has not impacted the inflationary pressures that keep rising till now. “Without concrete and quick steps to intervene, the rising tide of the inflation rate may continue into the end of the year,” she warned.

The Chamber, she said, has consistently recommended the need for special interventions in critical sectors and especially focusing on subsidising production to reduce the burden of rising cost of production. She criticised the Godwin Emefiele-led Central Bank of Nigeria (CBN’s) reversal of concessionary interest rate of five per cent on its intervention loans to nine per cent effective 20th July 2022. Dr Almona argued that CBN’s action does not show sensitivity to the burden on businesses at this time when they are struggling with sourcing forex, rising fuel costs, and massive disruptions to production lines due to insecurity. She urged the CBN to look beyond hiking rates to taking definite and articulated actions that address the factors driving the inflationary pressures.

For Yusuf, appropriate policy choices are needed to attract equity domestic and foreign private sector capital for infrastructure financing. According to him, the government needs to look beyond tax credit in its quest for complimentary funding sources for infrastructure.  “We should be looking more in the direction of equity financing. But for this to happen the policy and regulatory environment must be right,” he said.

With energy accounting for more than 40 per cent of manufacturers’ cost of operation, according to Mansur, the power sector is, undoubtedly, one of the priority areas yearning for such infrastructure financing, especially as repeated collapse of the national grid has been causing acute electricity shortage in the country, especially for manufacturers. The consensus of industry operators and stakeholders is that government pluck up the necessary political will and financial resources to address all the domestic concern plaquing manufacturers as well as building internal institutions and economic mechanisms to shield the sector and by extension, the economy from external shocks.

Already, the cascading and intersecting effects of the crises are exertion untold hardship on the manufacturing sector, leading to the closure of many industries, reduction in capacity utilisation, decline in the sector’s contribution to the nation’s Gross Domestic Product (GDP), large scale unemployment and increase in crime rate, among others

The eNaira has moved into its second phase with indications it is gaining wider acceptance. Central Bank of Nigeria (CBN) is driving the process, with a firm charge to the team implementing the initiative to make the country proud. Assistant Editor NDUKA CHIEJINA reports on the birth of eNaira as well as the benefits and possible risks involved in using eNaira for business transactions.

The Central Bank of Nigeria (CBN) officially launched the eNaira – a Central Bank Digital Currency (CBDC) – on October 25, 2021. It is the second CBDC fully open to the public after the Bahamas.

Like coins or cash, the eNaira is a liability of the CBN. The eNaira uses the same blockchain technology as the Bitcoin or Ethereum and can be stored in digital wallets used for payment transactions like the other two. It can be transferred digitally and at virtually no cost to anyone in the world with an eNaira wallet. Unlike the Bitcoin or Ethereum, the eNaira has been incorporated with stringent access right controls by the CBN. The eNaira is also not a financial asset in itself, but a digital form of a national currency that draws its value from the physical naira, to which it is pegged at parity.

The eNaira has been described as “a historic game-changer designed to open a new world of innovations, especially for people in the rural areas, who are at the bottom of the banking pyramid.” Giving the desire to make the eNaira available to the rural populace, the CBN Governor, Mr Godwin Emefiele, described the eNaira, as “a people-oriented and audience-centric digital currency with a face. Specifically, the eNaira seeks to evolve a fast, cheap, reliable and available payment channel.”

Deputy Governor, Economic Policy of the CBN, Dr Kingsley Obiora, who anchors the eNaira initiative at the CBN, said Nigeria is seeing a decline in the use of cash. “The minting of currencies in the CBN has been reducing in the last couple of years. There has also been an explosion in electronic business and e-business and we have seen the value of e-business grow from N393 billion in 2014 to about N2.4 trillion now.”

With the movement to e-business, Obiora said “the central banks in the world are responding to yearnings of citizens, which is why citizens in 96 per cent of central banks in the world are either working on digital currencies or they have done so already.”

Benefits of eNaira

At the launch of the eNaira in 2021, the CBN projected that the eNaira will bring multiple benefits that will manifest as the eNaira becomes more widespread and is supported by a robust regulatory system. The expected benefits of eNaira include the following: increase in financial inclusion. Its coverage is expected to expand to anyone with a mobile phone, even if they do not have a bank account. 38 million people; 36 percent of the adult population do not have bank accounts, and allowing those of them with a mobile phone to have access to the eNaira would increase financial inclusion and facilitate more direct and effective implementation of social transfers programmes. The CBN believes that the move would enable up to 90 per cent of population to use the eNaira.

Another expected benefit of eNaira is the facilitation of remittances. Remittances are usually made through international money transfer operators (e.g., Western Union) with fees ranging from 1 per cent to 5 per cent of the value of the transaction. The eNaira is expected to lower remittance transfer costs, making it easier for the Nigerians in the diaspora to remit funds to Nigeria by obtaining eNaira from international money transfer operators and transferring them to recipients in Nigeria by wallet-to-wallet transfers free of charge. Exchange rate reforms, including a unified market-clearing rate, that reduce the gap between official and parallel market exchange rates would enhance the incentives for using eNaira wallets to send remittances.

Reduced informality is another benefit that can be derived from the introduction of Naira. With over half of the nation’s GDP and 80 percent of employment Nigeria’s informal sector is huge. Once the eNaira becomes more widespread and embedded into the economy, it will bring greater transparency to informal payments and strengthen the tax base. Informal and formal businesses may also benefit if eNaira adoption enhances consumption through greater financial inclusion.

Some potential risks

The International Monetary Fund (IMF), in analysing the eNaira, said the digital currency “carries risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability. For example, eNaira wallets may be perceived, or even effectively function as a deposit at the central bank, which may reduce demand for deposits in commercial banks.” Since the eNaira relies on digital technology, the IMF has urged the CBN “to manage cyber security and operational risks associated with the eNaira.”

On the part of the CBN, the transfer of funds from bank deposits to eNaira wallets is subject to daily transactions and balance limits “to mitigate risks of diminishing the roles of banks and other financial institutions. Financial integrity risks, such as those arising from the potential use of the eNaira for money laundering, are mitigated by using a two tiered identity verification system and applying more stringent controls to relatively less verified users.”

For example, only people with a Bank Verification Number can open a wallet, but over time coverage will be expanded to people with registered SIM cards and to those with mobile phones but no ID numbers. The latter categories of holders would be subject to tighter transactions and balance limits. Even so, wallet holders who meet the highest identity verification standards cannot hold more than 5 million naira each in their eNaira wallets. To address cyber security risk, regular IT security assessments are expected to be conducted.

The IMF has also warned about the potential expansion of the use of the eNaira for cross-border fund transfers and agency bank networks, which could lead to new money-laundering and terrorism financing risks.

There are also worries about personal privacy on CBDCs, especially with account/identity of connected ones like the e-Naira, in the same way they have been raised on BigTech corporations. Stakeholders have noted that the e-Naira will expose more people, especially illiterates in the rural areas, to the risk of stolen passwords, hacked accounts, Internet banking frauds, etc.

The cyber security concerns are against the backdrop of a recently-released report, which showed that cybercrime will cost the world $10.5 trillion annual damage by 2025. In 2020 alone, the global loss from hacking and cybercrimes increased by nearly $1 trillion and tech experts say strategic efforts must be made to ensure the eNaira does not add to the crisis. As such, there are calls for investments in cyber security or partnership with the right stakeholders to protect the eNaira and ensure users enjoy its offerings

However, experts insist that creating the eNaira on the blockchain technology means you cannot have a duplicate or fake eNaira, as each eNaira note will be unique. To ensure security of funds, the eNaira is expected to have two-factor authentication and other measures.

Nigerians can link the e-wallet to their bank account or adopt the pay-as-you-go option with a prepaid option and a promise of an embedded security token system that makes information unreadable to fraudsters. In a nutshell, the eNaira is a critical national infrastructure fortified with comprehensive security and intelligence systems.

However, the IMF has offered to help with technical assistance and policy advice, stressing that “the IMF’s Monetary and Capital Markets Department has been involved in the eNaira rollout process, including by providing reviews of the product design. The 2021 IMF Article IV mission emphasized the need for monitoring risks and macro-financial impacts associated with a Central Bank Digital Currency (CBDC).”

The IMF said it is “ready to collaborate with the authorities on data analysis, cross-country studies, sharing the eNaira experience with other countries, and discussing further evolution of the eNaira including its design, regulatory framework, and other aspects.”

eNaira and the ordinary Nigerian

The eNaira functions effectively with the “e-wallet” because it is the fulcrum on which all transactions of the digital currency stands. Without the e-wallet, the eNaira functionalities are useless to intending users.

Those who want to use the eNaira must first visit their banks to register and have the e-wallet. Those in the rural areas can visit their nearest banks to register. Users can pay money from a created e-wallet (pair-to-pair), with eNaira as long as they have Near Field Communication (NFC), wifi, and bluetooth. It attracted zero transaction cost for the first 90 days after the launch. Payment is done through phone to phone transfer that is safe and secure. The initial zero charges also applied when users send money from their wallets to bank accounts and made withdrawals at agent or merchant locations.

Cash can be transferred to the eNaira and vice versa and since it is powered by blockchain technology, transactions on this platform enjoy some level of security such that even if one’s phone is stolen, the transaction is safe. Users can also transfer funds from their regular accounts to their eNaira. For instance, if you have N100,000 in your bank account, you can transfer N30,000 to your eNaira and be left with N70,000. If you owned no bank account hitherto, you can walk into a bank and use your cash to open an eNaira account and transact your business, rather than moving about with cash with all the concomitant risks.

The eNaira’s low transaction cost is considered a great attraction for traders since they will pay no fees for withdrawals and deposits to and from their bank account, and of course no transaction fees reduces the cost of commerce.

With zero usage of coins in Nigeria, most traders round up their prices to save everybody the stress of looking for’ change’ and the discomfort of carrying heavy metals in one’s pocket as money. By rounding up prices, business owners induce an artificial rise in prices. For example, a can of milk that ought to go for N76.43k will be sold for N100 instead. With the e-Naira, it becomes possible to transfer the exact cash price in the marketplace, especially in rural areas where every kobo means a lot. According to the CBN, “this reduces the possibility of round-up inflation.”

Expectations as Phase 11 is launched

On the 18th of August 2022, the CBN activated the second phase of the eNaira initiative during the eNaira Hackathon competition. Emefiele disclosed that Nigerians will be able to open an eNaira wallet and conduct transactions by simply using a designated Unstructured Supplementary Service Data (USSD) code on any phone. To carry out these activities, Nigerians will only have to dial *997# from their phones.

He revealed that within a short space of time, “both merchants and consumers with bank accounts can use the NIBSS Instant Payment (NIP) to transfer and receive eNaira to any bank account. This will further deepen the integration of the eNaira with the existing national payment infrastructure.”

The CBN Governor reiterated his “promise to increase the level of financial inclusion in the country because just like the Naira, the eNaira is expected to be accessible to all Nigerians and would provide more possibilities to bring in the unbanked into the digital economy.” He added that the “innovative products and services built on the eNaira would enhance Nigerians’ participation in the digital economy and promote further development of a burgeoning Fintech ecosystem.”

The second phase of the eNaira project, Emefiele said, “has begun and is intended to drive financial inclusion by on-boarding unbanked and underserved users leveraging offline channels. Hence, greater success is envisioned for the project with phase two expected to deliver more gains with a target of about 8,000,000 active users based on estimations using the diffusion of innovation model.”

Since the introduction of eNaira in 2021, there have been 840,000 downloads, with about 270,000 active wallets comprising over 252,000 consumer wallets and 17,000 merchant wallets. In addition, volume and value of transactions on the platform have exceeded 200,000 and N4.0 billion, respectively. Emefiele has not disguised his passion for the eNaira and he has pushed the team working on the project to deliver a world-class digital currency that will cement his legacy as CBN governor. The Hackathon, he said, “is an initiative that creates a collaborative environment for experts with a diverse set of skills to drive sustained innovation geared towards making the eNaira the pinnacle for digital financial services and the gateway to the digital economy.”

It is intended to find solutions that would drive financial inclusion, SME growth and the creation of start-ups; facilitate cross border trades and transfers as well as international remittances and FX exchanges; effective implementation of welfare-inclined government programmes; and enhance efficiency in the interbank market. The Hackathon is targeted at providing an engagement with critical stakeholders in the financial technology space to deepen the link between eNaira and Fintechs.

“The eNaira hackathon recorded a sizeable interest from young and innovative Nigerians with a total of 4,667 registrations, comprising 4,082 male and 582 female applicants. This further corroborates the fact that Nigerians, both within and outside the country, possess innovative ideas and are willing and ready to leverage on exciting opportunities that the eNaira presents for enhancing digital financial services and contributing to national development,” Emefiele said.

The CBN governor expressed confidence that the Hackathon will unravel “a pool of talents that would fuel the transformation of Nigeria into a world-class digital economy and beyond. From an initial cohort of over 105 groups that made the quarter finals and 75 teams that progressed to the semi-finals, the Hackathon reached its climax with 20 teams in the finals.

What experts are saying

The Managing Director of First Bank Nigeria, Dr Adesola Adedutan, said “there are significant differences between CBDCs and cryptocurrencies. CBDC provides a platform for the governments to leverage blockchain technology to maintain a centralised and institutional role over the currency.”

Daniel Awe, Group Head, Africa Fintech Foundry, said the CBN has transformed from a traditional regulator to a smart regulator. The eNaira Hackathon, he said, “is a platform that brings entrepreneurs, coders, product managers to solve problems and build new business models.” He stated that “all over the world, there has been disagreement between innovators and regulators because regulators usually look at the impact on financial stability as well as impact of those innovators on consumers as well as the risk while the innovators look at the opportunity in their ideas.”

There may not be respite in sight to the lingering crisis that has crippled academic activities in the country’s public universities for over six months as the federal government and the striking lecturers have been unable to reach a truce. FRANK IKPEFAN reports that one of the knotty issues is the inability of both parties to reach a consensus on whether or not to pay academic workers for the period wasted during the industrial unrest.

There appears to be a stalemate in discussions between the Federal Government and the Academic Staff Union of Universities (ASUU) because of the decision of the government to invoke the no-work, no-pay rule. With the decision, the government has sent a strong message to trade unions in the country that have adopted strike as a tool for arm-twisting governments at all levels by invoking the no-work, no-pay rule.

The government’s position was delivered by the Minister of Education, Adamu Adamu, during a press briefing with State House Correspondents in Abuja. While the Minister claimed that government had resolved almost all the contentious issues with the striking lecturers, except on two fronts – payments of withheld salaries and the conditions of service, the union disagreed. ASUU challenged Adamu to present evidence before the public of any of the issues the government had pursued to a conclusion.

Although Adamu didn’t disclose the second issue driving a wedge between the government and the leadership of ASUU from reaching a truce, a statement by the university lecturers suggested that the condition of service presented to them by the federal government team may be the second knot that the government was trying to untie. The university lecturers described the government as “miserly” in the statement.

On February 14, ASUU declared a one month warning strike that soon escalated into a full-blown strike. The strike, which has kept public universities shut and academic activities grounded and students and Nigerians bewildered, is in its sixth month, with no end in sight. Some of the demands of the union included: funding for revitalisation of public universities, payment of Earned Academic Allowances (EAA)/Earned Allowances (EA), payment of salary shortfalls, stopping the proliferation of state universities by governors and setting up of visitation panels. Others are: renegotiation of the 2009 FGN/ASUU agreement, adoption of the University Transparency and Accountability Solution (UTAS) as a payment platform for university lecturers and payment of withheld salaries and non-remittance of check–off dues.

To force the unions to return to classrooms, the Federal Government invoked the no-work no-pay rule in March. According to section 43 (1) – (14) of the Trade Dispute Act, an employer has the right to withhold salaries of an employee for work not done. Speaking with State House Correspondents on Thursday, Adamu said: “All contentious issues between the government and ASUU had been settled except the quest for members’ salaries for the period of strike to be paid, a demand that Buhari has flatly rejected.”

He stated that the government rejected ASUU’s demand to be paid the salary backlog because it believes that there has to be penalties for their action. Adamu said: “If you think it is for the government other than what the government is doing in the university to stop the strike, the standard the government has taken now is not to pay the months in which no work was done. I think this is the only thing that is in the hands of the government to ensure that there is a penalty for some behaviour like this.

“So, I believe teachers will think twice before they join the strike if they know that at the end they are not going to be paid and the federal government is not acting arbitrarily. Before, it was some magnanimity on its part, there is a law which says if there is no work, there will be no pay. I believe this will be a very strong element that will be a deterrent from going on strike. On the contrary, unions in tertiary institutions in the country, especially the Academic Staff union of Universities (ASUU), have been engaged in recurring and avoidable strikes that have crippled the university system.”

Adamu offered to take over negotiations with the university unions from the Minister of Labour and Employment, Senator Chris Ngige, who has been at the forefront on the negotiations on July 19, 2022.

Origin of no work no pay policy

On October 16, 2018, the Federal Executive Council adopted the draft White Paper enforcing the ‘No work, no pay’ rule. According to Ngige, the decision was in compliance with Section 43 of the Labour Act which he said the National Industrial Court had earlier upheld. The draft White Paper was allegedly submitted by a 10-man committee that the Minister chaired, which he said was constituted in 2017 to come up with a White Paper on an earlier technical committee report meant to stem the tide of industrial disputes in the country.

“But when workers go on strike, the principle of ‘no work, no pay’ will also be applied because that principle is enshrined in that same Section 43 of the Labour Act. That section says for the period a worker withdraws his services, government or his employers are not entitled to pay and the period for which they were absent will not count as part of his pensionable period in the public service,” Ngige had said in 2018.

In effect, workers that henceforth embark on strike are not entitled to salaries for the period the industrial action lasts. Government’s clever stance was that Section 43 of the Trade Dispute Act 2004 prohibited salary payment to striking workers and also made workers who are locked out by their employers without following due process entitled to their pay and other benefits. While adopting the White Paper, the government had added that both provisions were now to be enforced. The Trade Dispute Act gave the interpretation of strike to mean: “the cessation of work by a body of persons employed acting in combination, or a concerted refusal or a refusal under a common understanding of any number of persons employed to continue to work for an employer in consequence of a dispute, done as a means of compelling their employer or any person or body of persons employed, or to aid other workers in compelling their employer or any persons or body of persons employed, to accept or not to accept terms of employment and physical conditions of work; and in this definition:- (a) ‘cessation of work’ includes deliberately working at less than usual speed or with less than usual efficiency, and (b) ‘refusal to continue to work’ includes a refusal to work at usual speed or with usual efficiency.”

Rules not enforced

In the past, the government had failed to enforce the no-work no-pay rule despite invoking it. On concessional grounds, the government had always turned around to pay striking unions for the period they didn’t work. For example, in 2020, when the leadership of ASUU went on strike for ten months, the payment of their salary arrears was one of the conditions the union gave the government before calling off the strike.

The government, through the intervention of Ngige, ensured that the university lecturers received all their withheld salaries before the end of 2021 as contained in the 2020 Memorandum of Action it signed on December 22, 2020 before suspending the strike. “The FGN affirmed its commitment to pay all withheld salaries of ASUU members who had not enrolled in the Integrated Personnel and Payroll Information System (IPPIS). However, due to special management of funds, the FGN promised to pay in instalments the withheld salaries with effect from December, 2020, starting with the universities that had made submissions of their comprehensive personnel list. The exercise is to last till January 31st, 2021,” the MoA partly read.

ASUU talks tough

However, this latest decision by the government to stand by its policy may have ruffled the university lecturers. President of ASUU, Prof Emmanuel Osodeke, said his members are not threatened by the comments made by the Education Minister, Adamu, last week. Osodeke, who spoke on Arise Television, said: “Our response is that no-pay no-work; that is our major response. I watched the Minister today and I thought as the Minister of Education and as a government, he would come to the table and see how he will resolve the issues in the Nigerian university system rather than issue threats.

“By our academic standard, we are not afraid of threats. Even during the military era, we were not afraid of threats. We will fight for the Nigerian education system to be such that we will now have foreign students coming to Nigeria, foreign lecturers coming to Nigeria as Nigerian students are going outside and Nigerian lecturers are going outside. That is what we want; not coming to talk on television about no-work no-pay. So what?

“As an academic, go and look at my condition of service. I have three lines of work – teaching, research and community service. All we have done is to stop teaching. It is not as if we have stopped research and community service. When we resume, we are going to start from where we stopped and bring up to the present and continue. All the work we have not done in the past, we are going to sacrifice our leave in the next two or three years to meet up those periods to ensure that the students get quality education. So if the government wants to close down the system, it is left to them.

“I am really surprised that the Minister of Education who in the past was well quoted in the dailies – he had a column in one of the newspapers – where he actually supported what we are doing by saying Nigerian universities were not growing and he is coming here to threaten us with the issue of no-work no-pay. So what? I expected him to have quoted one evidence that they have agreed on one of the seven items we are talking about. If they want to kill the system, let them kill it. If their children are in Nigerian universities, they will not be saying what they are saying in the media.”

Forget unfinished academic sessions if you won’t settle our salary backlog, says ASUU

Prof Osodeke further said the lecturers should not be expected to complete the unfinished academic sessions of 2020/2021 if the government insisted on the no-work no-pay policy. He said: “If we agree on that, therefore, the lectures we should have given to students for 2020/2021 and 2021/2022 sessions should be allowed to go; so we start a new session, 2022/2023, in September. Therefore, by July next year, I will go on my leave as we used to have in those days so that the backlog is gone. All the lectures that remain; all the two sets of admissions that JAMB has given that are waiting should become irrelevant.

“When other unions go on strike and come back, all those periods for which you are on strike, you don’t need to do the backlog of work. But for ASUU, when we go back today, we are going to start from the 2020/2021 session. For these two sets of students that have been admitted by JAMB, we have to teach them over these periods to ensure that we meet up with the system. So, we are going to do the backlog of the work we have left behind. We are not going to start today and say ‘this session is 2022/2023.’ Therefore, all these two sets of people that have been admitted by JAMB are cancelled. We have to take another admission for the 2023/2024 session.”

Lawyer, senator weigh in

A human rights lawyer, Frank Tietie, called on ASUU to make “the right kind of sacrifices” to bring the strike to an end. Tietie, who is the Executive Director of Citizens Advocacy for Social and Economic Rights (CASER), said the leadership of ASUU is not making the kind of sacrifices that are needed to move the country forward. “It is clear ASUU has been on strike for months now; Nigerian students have suffered, parents have suffered – the entire Nigerian public is bewildered that this strike that has been unending doesn’t seem to have any justification and that lecturers simply use the issue of standard of education as a means for a call to increase their salaries.

“This has been an unending culture in the university system from the 70s, 80s and all through the 90s. When is it going to stop? There has to be a time where the government has to make a form of disincentive for strike. Strikes have become lucrative for university lecturers especially when they go on strike for whatever time it would take, say six months, seven months in expectation that they will be paid in block.”

The lawyer added: “Nobody should actually be praised. I think we should follow the standard that the law has set. ASUU is appearing to be quite a complicated union and it is understandable. It is not making the kind of sacrifices that are needed to move the country forward. It acts as if the President Muhammadu Buhari administration has been responsible for all the troubles in Nigerian universities. Whereas I recall when I was in the University of Benin in 1992, these are the same issues that they went on strike for under Prof Attahiru Jega (former chairman of the Independent National Electoral Commission) and they have gone on successive strikes and the same issues have been there and they all revolve around salaries.

“I think for a country to move forward under this condition, under this circumstances where this country is troubled on all sides, sacrifices need to be made and we don’t need to further terrorise and terrify the polity by all of these complicated demands and then creating a state of hopelessness for our students. ASUU needs to make the right kind of sacrifices. They don’t need to abuse the powers that they have. They are so powerful and secretly the government feels threatened by unions like ASUU that can actually bring it down. Take for example if Nigerian students were to revolt against the government because of the narrative that ASUU is putting forward. The government will be sacked and that is worse than a coup. ASUU should know better the implication of what they are doing and they shouldn’t act as if they want to bring down the government. There is no alternative to the government.

“We can work this out. It is a matter of resources. If the government doesn’t have the resources, it doesn’t have. Yes there is a lot of profligacy. The corruption in government is also applicable in the Nigerian universities. In fact, it is sometimes worse in many of these federal universities. There is a level of contributory negligence to the degradation that is currently facing the education system and we need to come together as a country to move us forward and to leave this quagmire situation that we are in.”

Also, a former federal lawmaker, Senator Shehu Sani, asked the Federal Government to set aside the extant law of ‘no-work, no-pay’ and pay the striking universities lecturers their six months’ salary areas. Sani, who represented Kaduna Central in the 8th National Assembly, said both the federal government and ASUU should not be talking about law, but negotiations and compromises now, especially that students who he said are at the receiving end have lost one academic session.

“First of all, it is a fact that there is a law on the ground which justifies no-work, no-pay. But the issue is that, at a time like this, we are not talking about law; we are talking about compromise and negotiation. It is important that the two parties should be conscious of the fact that the consequences of this crisis is impacting more negatively on the future of the students and our young ones in the universities. So, when there is a matter of negotiation, there is need for compromises and even if the payment of the areas of ASUU members will help in ending the strike, let them be paid. What matters now is how do we solve the problem? Especially that the students have lost a full academic session. So, compromise can come at the price of anything.”

How to resolve the statement

According to subsection (3) of the Act, only the minister of Labour and Employment, Ngige can intervene and resolve whether the striking lecturers should be paid or not for work not done. Tietie added: “There is a good thing about it. Subsection 3 of that provision states that only the Minister of Labour can actually resolve whether or not government should pay for the time that the lecturers have gone on strike. But the citizens are concerned. If you keep making strikes lucrative: you don’t work – then you punish students, you punish parents and throw the entire polity into confusion and you get so well paid after six months, somehow somewhere the government has to be decisive.”

Will the Minister of Labour step in again and resolve the stalemate now that the Education Minister has failed to get the lecturers to call off their strike? Will Ngige recommend to President Buhari that the lecturers be paid like he did in the past? Will the President make a U-turn and approve the payment of salary arrears for the teachers? Nigerians are waiting to see what the government will do next.

Recurrent reports that Nigeria is losing over 400,000 barrels of its cherished resource to thieves, who remain  faceless, do not speak well of the country and its energy sector overseers. In this analysis, Group Business Editor SIMEON EBULU examines the issues around oil theft

The volume of crude oil that is being stolen in Nigeria, according to records and account given by international oil producing companies, is over 400,000 barrels daily. This figure has also been corroborated and attested to by the Minister of State for Petroleum Resources, Chief Timipre Sylva. Shell Petroleum Development Company (SPDC), the leading oil producer in Nigeria, has threatened to quit doing oil business in the country, and has equally vowed to pull out its investments to other saner shores on account of the volume of oil it loses every day to oil theft and the apparent acquiescence or helplessness feigned by relevant government agencies to stop or put an end to it.

The magnitude of the financial hurt to this country arising from oil theft is underlined by the fact that those drawing attention to this immoral, sordid and corrupt behaviour, are those at the centre port of the industry, among them Shell and other international oil companies that have been here long enough to know the harm and damage oil theft, of the volume being reported, can do to the economy of this country if the vice continues. Shell’s Managing Director, Osagie Okunbor, who out of concern for what the development portends for the country in general and the oil industry in particular, drew attention to this mess when he spoke at the Nigeria Oil and Gas Conference in Port Harcourt, saying crude oil theft has resulted in the shutdown of two of Shell’s major pipelines. According to him, as a result, Nigeria could not meet its OPEC (Organisation of Petroleum Exporting Countries) oil production quota of 1.8 million barrels a day. In his words: “Two of our most important pipelines in this country have been shut down with hundreds of thousands of barrels a day shut-in,” adding that “it is a fact that the issue of theft, whether as a standalone, or as the basis for us to meet our OPEC quota, is an existential threat for this industry,” and by extension, Nigeria.

What further proof does anybody need, or alarm does anyone need to sound to draw government’s attention or its agencies to act to arrest the situation, than the one coming from producers of the product the nation relies on for its economic mainstay? Crude oil accounts for more than 90 per cent of Nigeria’s foreign exchange earnings. But here we are acting in pretence, chasing the shadows rather than the substance.

If you were to examine the volume of oil lost to theft as it has been reported, (assuming that’s all of it), you could immediately deduce and fairly draw an accurate conclusion that 400,000 barrels of crude oil stolen every day is not what Niger Delta militants are carting away. That volume of crude oil that cannot, by any stretch of imagination, be accommodated in drums nor transported in canoes and speed boats, is not what the illegal refiners in the creeks and Niger Delta riverine coastlines, whose refining equipment the security agents destroy every now and then and display with glee on the pages of newspapers and televisions as successful raids against oil thieves, as they want us to believe, is far from the truth and reality. It’s about time to stop the deceit.

The volume of crude at play here, to put it in perspective, is more than the equivalent of the 320,000 barrels per day volume that the NNPC had allocated to some 16 oil firms under its previous crude for refined products swap arrangement required to supply refined fuel, diesel and aviation fuel, among others, for Nigeria’s daily consumption in lieu of the country’s inability to refine its crude in-country.  Nigeria is the only OPEC member that is unable to refine its crude for domestic consumption despite the existence of four refineries, all moribund, but for which NNPC claimed it had committed over N100 billion in 2021 alone for their maintenance.

To return to the issue at stake, we must understand that Shell has been in Nigeria for decades and like the other oil majors, has no lesson to learn from Nigeria’s self-seeking oil behemoth, NNPC Limited on issues around oil prospecting and its management. Okunbor has already put Nigeria on notice about the bleak prospects awaiting would-be indigenous operators in the oil industry as the IOCs offload their onshore assets to focus on exploration in the deep water.  The Shell Managing Director said local companies, which won licences to develop marginal fields, would face challenges in transporting their crude once they start production. This implies that crude oil theft will continue unabated along the delivery and transportation lines and these small oil firms, unlike the IOCs, lack the muscle to absorb the losses from such thefts. So while on the one hand we are encouraging local participation, on the other hand, we are erecting road blocks on their paths, or rather doing nothing to remove existing obvious roadblocks, like oil theft.

What is more curious and intriguing about Nigeria’s oil theft story is the pretence and what the Federal Government, or the Ministry of Petroleum Resources and the NNPC Limited want the rest of us to believe, that is, that they’ve had no knowledge possibly until now of the identity of the people, or companies involved in the theft of at least 400,000 barrels per day of Nigeria’s oil. Haba! How did it then come to public knowledge that so much crude oil was being stolen? And if the government knew, why have they not acted ever since? And over the period that this was going on, who has been arrested, either of persons, vessels or tankers?

It’s clear that before the Minister of State for Petroleum Resources, Chief Timipre Sylva, joined the list of complainers by adding his voice in condemnation of this vice, he must have become aware, not only of the colossal damage the sleaze has done to the economy, but also, I can surmise, also of the calibre of people involved in the act. Sylva, who spoke in Owerri, the Imo State capital, when he visited the Governor, Hope Uzodinma last week, expressed concern that the increasing cases of oil theft had impacted Nigeria’s earning capacity negatively in a manner that could be worse off than imagined. He admitted to Nigeria losing 400,000 barrels per day to crude theft, adding that the economic losses attributed to oil theft are capable of crippling Nigeria’s economy.

Sylva, who described the trend as a “national emergency,” said Nigeria, just as Shell MD warned, “had fallen short of OPEC daily quota, from 1.8 million barrels to 1.4 million barrels, due to crude theft. It is a national emergency because the theft has grown wings and reached a very bad crescendo,” he stated.

It has not been ascertained, nor can anyone put a finger to it yet for how long this oil theft has been going on, we will leave that to the Federal Government, or its newly created and priced oil company, the NNPC Limited to unravel, or even the international oil companies themselves, if they are even still interested any more in staying and doing business in Nigeria.

What government loses

For the purposes of argument, if you peg the price of a barrel of Brent crude, Nigeria’s variant at $96+, according to Market Insider, an International Oil Spot Market platform, Nigeria would have been deprived on a daily basis, no less than a princely $38.4 million. This translates into about $1.152billion in a month. If we take an average of $100 per barrel spot market price, since the oil price has been oscillating around that margin, then Nigeria’s loss over a 30day monthly period would be $1.2billion, ceteris paribus (all things being equal) as economists would say. But we all know that all things are never ever equal, not in Nigeria.

The mathematics of how much Nigeria has lost to oil theft, and the pains Nigerians have gone through over this prolonged negligence that oil theft has festered cannot even be resolved on the basis of monetary evaluation alone. It goes beyond that. But simply put, just to drive home the point, a barrel of crude oil, the equivalent of 159 litres, when mixed with other additives, or refined, churns out the following: 73 litres of Petrol (PMS), 36 litres of Diesel (AGO), 20 litres of Jet fuel (JET A1) & heavy fuel oil, as well as 6 litres Propene and 34 litres of other products (Butane, Asphalt & Sulphur). These are internet verifiable data if in doubt.

As of today, Nigeria has fully deregulated pricing of AGO, JET A1 and some of the other gasoline products, leaving PMS hanging in the balance. The decision as to continue with PMS subsidy, or not is uppermost on government’s agenda as we speak. Only last week, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said Nigeria is expending over N18 billion daily on fuel (PMS) subsidy, adding that the landing cost of a  litre of petrol was already in excess of N400.

From our basic refined crude oil extract, those who steal 400,000 barrels of crude oil daily can comfortably receive 29.2 million litres of PMS daily, presumably (73×400,000) If they succeed in ferrying that volume of fuel into Nigeria, they’ll receive a minimum of N11.68 billion  every day. If you discount the retail pump price of N175 per litre as fuel is being sold in some filling stations, these thieves, whoever and where-ever they are, will go home with a whopping N6,57billion filthy profit every day. Don’t also forget that sales returns from AGO, JET A1 and the others are not yet factored into the equation.

You can’t convince nobody, any knowledgeable Nigerian for that matter, that this kind of persons with access to these huge funds derived surreptitiously from the nation’s commonwealth are faceless people not known to the Federal Government and its agencies. You may fault the figures as not being totally accurate, there’s no problem with that, but you won’t be able to deny knowledge of the existence of these economic saboteurs. There’s of course reasonable ground to conclude that those involved are well known. Here is the argument. A senior official, who worked in the Harbour Department of the Nigerian Ports Authority (NPA), explained what should be the normal and acceptable procedure of receiving crude oil from Nigeria’s shores by carriers. According to the official who asked that his identity be veiled for now, any vessel en-route Nigeria to receive crude oil, must as a matter of routine notify NNPC Limited, or Corporation as it then was.

The official said it was then incumbent on NNPC Limited to inform other relevant government agencies, detailing the name, or names of the vessels, their expected date of arrival, and so on and so forth so as to ensure unity reporting at the loading point. But this was never carried out to the letter, the official said, adding that the only reason this could happen, is either that the person involved in manipulating, or undermining this established norm is in NNPC, or the person is in a position to command NNPC.

It is inconceivable to assume, or imagine that with the level of technology and the presence of security personnel, especially in the maritime sphere, any oil vessel can simply dock in Nigeria’s waters in whatever anchorage and take 400,000 barrels of crude oil daily undetected. It is heart-warming to note that the Federal Government has taken a step by engaging Government Ekpemupolo in a Pipeline Surveillance Contract to stanch the crude oil theft.

The culprits

So what becomes of the culprits, one may ask. The unfolding development surrounding the theft of the nation’s crude oil could not have come at a better time. Only recently, Mele Kyari, the Group Chief Executive Officer of the newly PIA (Petroleum Industry Act) created NNPC Limited was upbeat on air celebrating his new empire. It appeared to me, as I watched him in that ARISE Prime Time interview anchored by Charles Aniagolu, that the man was playing to the gallery, being theatrical and was not really attuned to the concern, the weight and the responsibilities bestowed on the new entity that he heads – the Nigeria’s cash cow. Kyari, in my opinion, was concerned, more with the bigness of NNPC Limited and how it compares with Saudi Arabia’s Aramco and all that sweet nothing.

As hard as Aniagolu tried to make him understand and say how he intends to make NNPC Limited relevant and answerable to its owners, Kyari could not bring himself to appreciate and explain what the new entity represents and how he intends to run it for the benefit of Nigeria, rather he dwelt more on how the organisation is now free from government’s control and supervision and how NNPC Limited will not be remitting money to FAAC but will only be paying dividends to its owners, whom he couldn’t even expressly name, or identify.

This issue of crude oil theft has clearly exposed the underbelly of governments’ in-depth and direct involvement in running businesses and how care free government-run businesses and its regulatory agencies treat with levity and dissonance, weighty matters of graft and holding people accountable when issues of Good Corporate Governance are at play. I do not see how NNPC Limited can be exonerated from this web of crude oil theft in all its ramification. Up until Shell and the IOCs raised the alarm and issued the stern threat to quit the oil business in Nigeria’s shores, NNPC was never in the picture.. The new NNPC Limited as Kyari would want us to believe, is the Eldorado Nigeria has waited for and the best thing that has happened in the oil and gas industry. There’s nothing in the air to support this assertion. Not now with 400,000 of crude oil daily sipping into the domain of some faceless persons and companies.

To restore confidence and assure the citizenry that anything good will come out of this behemoth called NNPC Limited, they should be able to name and expose those involved in this humongous oil theft scandal, reveal how long this has been going on and commence effective prosecution of the culprits. Also, the recent spar between NUPRC (the Nigeria Upstream Petroleum Regulatory Commission), the regulatory arm of the larger NNPC Limited and its stance against the acquisition by a wholly owned Nigerian company of the assets of a foreign oil conglomerate, Mobil Oil Producing Company Unlimited, smacks of very bad judgment and a signal that those at the helm of affairs of the nation’s oil sector, have not learnt the ropes. For a critical Nigerian oil firm to be so shabbily shoved aside from participating in harnessing the resources of the nation as a stakeholder, at a time that the Federal Government is pushing for more involvement of indigenous oil companies to take to the centre stage of exploration and production in the nation’s oil and gas sector, to say the least, is appalling.

NNPC Limited must understand that its efficiency and delivery of whatever dividends the PIA has bestowed on it can best be achieved in its structure as lean and compactness organisation, certainly not as one that should pride itself in its bigness. The tendency in major oil producing nations globally is to incentivise IOCs to come and invest in their domain. It’s not a common practise for governments to go a borrowing to invest in entities where private sector finance is readily available and willing to invest. Shoving Seplat aside from taking over Mobil Producing Nigerian assets simply because you desire to operate a bigger public entity in Nigeria at this time is bad corporate judgment. Nigerians are still familiar with the history of the likes of Nigeria Airways, Nigerian National Shipping Line, NEPA and NITEL just to name a few. Will NNPC Limited end up differently? The challenge of oil theft that is starring the nation in the face so starkly, needs to be nipped in the bud in a manner that it does not recur in this magnitude for all time.